Every company will have a slightly different invoice processing method, especially if they're automating and using different systems. However, there's one thing that every company must do, regardless of the organisation's size or whether they're using some fancy software, and that's using a Goods Received Note (GRN). For a seemingly simple document, they play a pretty big role in the accounts payable process. If you can nail your understanding of them, you're going to save yourself a lot of hassle in the long run.
Goods Received Note Meaning: The Basics
In essence, a Goods Received Note (GRN) is the official receipt of goods or services by customers to their suppliers. Suppliers and customers can keep and refer to this document as proof that the ordered goods were delivered. Usually sent along with an invoice, the GRN should always be kept and saved so each company's finance team can refer back to it at any time.
Simple, but how do I write a Goods Received Note?
There are no strict guidelines to follow as to the style of your GRN, but there are a few key things that must go on everyone:
- The name of the supplier and their supplier number
- The date and time of delivery
- A note stating which products were delivered
- The quantity of each product (eg. toilet plunger, 15)
- The name and signature of the procurement manager
- The name and signature of the supplier manager
You may encounter a Goods Dispatched Note, and there's no need to be confused about that. They act as proof from the supplier that the goods have been dispatched, and once those goods have been delivered, that same note can then be referred to as a Goods Received Note.
When does the Goods Received Note occur in invoice processing?
Here's how invoice processing usually goes:
- Decide what you need and identify your chosen supplier
- Create purchase order and send to your supplier
- Receive the invoice from the supplier
- Receive the goods
- Confirm receipt of delivery
- 3-way match using the purchase order, invoice, and GRN
So the Goods Received Note comes in right at the end of the process, and serves as evidence that the purchase has been completed and goods have been received correctly.
Ok, and? Why is the GRN so important?
When you're part of a bustling finance team, keeping track of every purchase at every step is incredibly important. That way if there is an issue you can identify it straight away and know what the cause is. Using GRNs as part of 3-way matching also means that finance teams can make payments with confidence. If you have both approval workflows and 3-way matching in your process, you can almost eliminate wasteful spending and mistakes.
GRNs are also helpful in maintaining your supplier relationships, because when someone from both parties has signed it off there is no risk of misunderstanding and all your steps are on record.
Goods Received Note FAQ.
Why is a Goods Received Note Important?
A GRN is important because it allows organisations to confirm their order was sent by the supplier. They can then mark it as received.
Who sends the Goods Received Note?
A goods received note is issued and sent by the supplier. The GRN is then kept and filed by the recipient’s finance or AP team.
What happens after the Goods Received Note?
Once the GRN is issued, the recipient’s AP team will use it to three-way match and confirm that all their data on the purchase order, invoice, and GRN is correct before they make the final payment.
How to GRN an order?
We have excellent guides on key parts of the order process, when the goods or services have been received and how to GRN an order. This article explains how to GRN your purchase:
LEARN MORE HOW TO GRN AN ORDER
What if my purchase doesn't have a GRN?
We have a workflow step for invoice approvals that can check the GRN status. It will then pass onto the next step if the condition is true but will wait if the GRN status isn’t acceptable. The workflow step will then send recurring reminder emails, and place an alert for the designated user when they login to Zahara. Read on to find out how to set this up.
LEARN MORE ABOUT WAITING FOR A GRN HERE
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